In late January 1915, the first American merchant vessel lost to hostile action was sunk by a German auxiliary cruiser in the South Atlantic. The
William P. Frye, an imposing four-masted steel windjammer (barque), had just rounded the horn en route from Seattle to England with a 5,034-ton cargo of wheat when
SMS Prinz Eitel Friedrich stopped her on January 27. Korvettenkapitän Thierichens ordered the windjammer to jettison her cargo. The Americans stalled, and Thierichens sank the ship, the namesake of a senator from Maine, on the 28th.[1] This action signaled the beginning of a new phase in the naval war that would profoundly affect Latin America.

British merchant ships had been accused of serving as auxiliary cruisers for the Royal Navy early in the war. A fierce pre-war rivalry between Great Britain’s Pacific Steam Navigation Company (PSNC) and the Kosmos Line intensified after war broke out. The PSNC had plied Eastern Pacific waters since 1840, and now linked Panama, Punta Arenas and points in between, while also touching at Buenos Aires, Montevideo and Rio de Janeiro. PSNC ships serviced Admiral Craddock’s fleet before it was sunk at Coronel, provoking protests from German Minister von Erckert, of course. In late October 1914, he successfully prevailed upon the Chilean government to intern two British freighters,
Benbrook and Langoe, that had ferried supplies to the Royal Navy warships.[2]

German naval intelligence maintained covert supply lines to warships in American waters and informed them of targets. Captain Karl Boy-Ed, German naval attaché in Washington, commanded an extensive
Etappendienst network in the Americas that was active from Seattle to Punta Arenas, comprising a vast underground of naval intelligence and logistics experts. Its’ first mission was to secretly purchase, assemble and distribute provisions and coal to German raiders in the Pacific Ocean. Key figures in the South American arena included German Minister to Chile Karl von Erckert in Santiago, Consul Rudolf Stubenrauch in Punta Arenas, and naval attaché Captain August Moller in Buenos Aires. Moller was accredited to Argentina, Brazil, Chile and Uruguay, and during the first months of the war organized the dispatch of no less than 37 auxiliary vessels to assist Admiral von Spee’s fleet and other German warships. [3]

German shipping and trading companies played leading roles in the Etappendienst. H. Folsch y Compañia in Valparaiso and Brauss Mahn and Company in Buenos Aires equipped auxiliary vessels for the German fleet. [4] The role of the Chile-based Kosmos Line was eventually exposed by British Naval Intelligence via The Providence Journal newspaper. Kosmos would load a single vessel with large quantities of Chilean coal, supposedly to distribute among its’ large company fleet, but secretly transferred the precious fuel to warships at sea. The Kosmos Line petitioned the Chilean government on September 29, 1914 for permission for
Luxor to embark up to 12,000 tons of coal to distribute to the Kosmos fleet, rather than compel the disbursed ships to make a special trip to coaling ports and risk seizure by the Royal Navy. The latter action aroused the Chilean government’s suspicions: after all, Foreign Minister Lira had offered Chilean Navy escorts so that German merchantmen could continue trading.[5] The Kosmos Line flaunted Chilean law and port authorities:
Luxor vanished from Coronel late one October night, then mysteriously appeared six weeks later in Callao, where it was interned by Peruvian authorities. In the meantime, on November 7-8, 1914, two other Kosmos liners,
Santa Isabel and Amasis, delivered supplies to Scharnhorst and three other warships in the Easter Islands.[6] Clearly the Kosmos Line’s patriotic
Etappendienst duties transcended its commercial mission.

A motley variety of mercenaries cashed in on this underground traffic. They included a Norwegian bark named Helicon and US freighters Sacramento and Mazatlan among many others.
Helicon and Sacramento even attended the brazen convocation of German warships in the Easter Islands on November 7-8, 1914. Sacramento had cleared a US port with a large cargo for Valparaiso yet arrived there empty; her captain insisted that the German Navy commandeered his ship en route and relieved her of her cargo. Other ships employed false manifests to camouflage their secret supply activities and hefty profits therefrom.[7]

British protests exposed the secret German supply missions and caused a scandal in Chile. German Minister von Erckert explained the situation in a November 24 telegram to Berlin:

Lately, as a consequence of the British protests, it has only been possible to send supplies by secretly dispatching two Kosmos steamers. When the supply ships which had sailed under a false pretext returned, and it became known that the squadron had remained some time at Juan Fernandez [Island], public opinion was much excited at the contempt thus shown for the sovereignty and neutrality of Chile.

Intercepted telegrams between Captain Boy-Ed in Washington and the Admiralty Staff in Berlin revealed the activities, strengths and weaknesses of the
Etappendienst to US State Department intelligence. In December 1914, Boy-Ed informed Moller when freighter Fanni—apparently a target for German marauders—sailed from Norfolk for Buenos Aires. A German agent in Pernambuco, Brazil notified Boy-Ed by telegram when merchantman Sierra Cordoba left Montevideo on December 18 to supply
SMS Dresden with coal and provisions, and when Josefina pulled into Montevideo four days later to take on more supplies for the raider.[8] While the
Dresden haunted shipping lanes, Consul Stubenrauch kept Berlin informed of the ship’s situation via Moller and von Bernstorff. In mid-January the latter told the Admiralty that
Dresden was “hidden at Tierra del Fuego Island… in the Cruiser outfitting place,” and that supply ships
Josefina and Eleonore Wörmann had been captured by the British.[9]

On February 4, 1915 the German Navy added a second barrier to trade between Europe and Latin America when it began submarine attacks against all ships going in and out of Allied ports. German
unterseebooten—U-boats—initially targeted merchant ships supplying Great Britain. French and Scandinavian markets were choked, and British trade became erratic because of shipping losses and the need to conserve financial resources. Only Brazil possessed a merchant fleet of any size in Latin America, so the German submarine peril threatened Latin American commerce and economic well-being much more than it indigenous ships and sailors. British ships bore the brunt of trans-Atlantic trade and the risk of sinking now as well—British merchantmen had carried two-thirds of Argentina’s pre-war commerce, and that proportion increased as they filled the void left by Germany’s interned carriers.[10] Nevertheless, Latin American passengers and cargo would inevitably suffer from the German submarine campaign.

Chile’s German immigrant population enthusiastically supported the Etappendienst. The bulk of Chile’s 17,686 Volksdeutsche and 10,724
Reichsdeutsche were clustered in rural, all-German settlements close to the coast. Most were farmers and tradesmen long detached from the Fatherland, although the powerful merchants, importers and bankers in Santiago and Valparaiso maintained close contact with their diplomatic and intelligence services. Chile was also home to some 3,813 Austro-Hungarian citizens, although many of the latter were Dalmatians of dubious loyalty to the Central Powers.[11]

In February 1915, the heartfelt support of Chile’s German colony for the war effort emerged in the seclusion of Quintupeu Fjord, in the Gulf of Ancud, near Llancahué Island.
SMS Dresden, the last surviving cruiser of von Spee’s fleet, slipped into the single narrow entrance of the fjord on February 6, 1915, squeaks from her damaged machinery echoing off sheer green walls of rich flora that towered 1,500 feet over the ship. At dusk a sailboat appeared, piloted by a German-Chilean merchant, Enrique Oelkers, flying a German flag and bringing supplies, coal, mechanics and Albert Pagels, followed by other small craft that sheepishly approached
Dresden. Soon the deck of the warship became the scene of an impromptu party as German settlers served sausages, strudels, beer and other delights, while a band began to play. The sailors were enchanted by this warm welcome, the archaic language of their visitors, laughter, jokes, children and even girls who were happy to dance with the valiant heroes of
SMS Dresden. Early the following morning, the rejuvenated crew began repairing the rudder and other equipment. Damaged parts were sent to Puerto Montt and Calbuco to be fixed. Soon the
Dresden was ready to make a dash for the open ocean. Captain Lüdecke asked Pagels for one final favor: to continue running back and forth to port to hoodwink British spies into thinking that
Dresden was still undergoing repairs.

When SMS Dresden emerged from Quintupeu Fjord, she left behind the legend of a hidden chest of Mexican treasure and, of most concern to Allied intelligence, reports of an enthusiastic German fifth column in Latin America.[12] She also opened the scars of a Chilean-Argentine dispute over the waters and territory of the Beagle Channel, which prompted Chilean naval authorities to insist a number of times that their government establish an administrative presence at Navarino, to no avail. The
Dresden’s legacy would be one of mystery, suspicion and renewed animosity between neighbors.[13]

SMS Dresden played cat and mouse with an Allied flotilla that was scouring the Eastern Pacific in pursuit. Defiantly, the German marauder remained in American waters contrary to Berlin’s desires and ran down and scuttled a British bark, the
Conway Castle, 560 miles southwest of Valparaiso on February 27, 1915.[14] Soon after, a gifted signal officer aboard
HMS Glasgow, Charles Stuart, intercepted and deciphered a message from Nauen to
SMS Dresden that revealed the raider ship’s next rendezvous for coaling. Stuart’s feat ordained
Dresden’s day of reckoning when she was cornered by British cruisers Glasgow and
Kent and armed transport Orama at Cumberland Bay in the remote Juan Fernandez Islands, 400 miles off the Chilean coast on March 10, 1915. Captain Emil Fritz Lüdecke could no longer scrounge enough coal to keep
Dresden moving; even the ship’s cook had to forage for firewood on the island.
HMS Glasgow pressed the attack in Chilean waters, violating Chilean neutrality but forcing
Dresden’s surrender after a brief exchange of gunfire. On March 14, Lüdecke scuttled
Dresden with her colors flying and guns stilled trained while Lieutenant Wilhelm Canaris distracted the British with a meaningless parlay about surrender terms.[15] This reduced the German naval threat in the East Pacific and South Atlantic Oceans for the time being.

Coincidentally the German surface threat to North Atlantic commerce diminished that same week when SMS Prinz Eitel Friedrich put into Norfolk, Virginia for repairs and was interned. During her 218-day war cruise from Shanghai she sank eleven merchant ships totaling 33,423 tons.[16]

Four days after scuttling their ship, 300 officers and men of Dresden were transported to the Chilean Navy’s main base at Talcahuano Bay for internment on Quiriquina Island. Minister von Erckert energetically protested their internment, to no avail.[17] However, many of the
Dresden crew would not be content to sit out the war in internment. The German intelligence network in Chile and Argentina promptly began working on escape plans for a few internees. Some would become participants in campaigns of espionage and sabotage in the Americas and at least one would manage to return to Germany.

Only in March 1915 did Chilean officials begin to realize the extent of German abuse of their neutrality. Santiago dispatched the training ship
Baquedano to Easter Island to investigate rumors and British protests of German activity there. Chilean naval investigators discovered that
SMS Prinz Eitel Friedrich had made Angarroa a temporary base in early December 1914, anchoring for eight days and establishing an armed observation post on Mount La Pérouse while stripping the captured French sailing ship
Jean.[18] Chilean diplomats eventually protested these indignities with Berlin, but they did not find out about the secret Quintupeu Fjord repairs until years later.

The last German auxiliary in the Atlantic, SMS Kronprinz Wilhelm, scored its final kills off the Brazilian coast in March. It had captured the large French freighter
Guadaloupe on February 22 en route to Bordeaux from Buenos Aires. Kronprinz Wilhelm clung to her for two weeks, slowing draining her provisions like a spider before discarding her on March 9. In the meantime, the
Holgar, a German steamer that had provided logistics support to Kronprinz Wilhelm for 36 days, was interned in Argentina February 26. The raider captured, looted and sank two more British vessels near the end of the month, but could not scavenge enough to sustain her 420-man crew. Desperate for coal, water and food, SMS Kronprinz Wilhelm sailed into Norfolk, Virginia on April 11 and was interned two weeks later.[19] From this time forward the only surface vessels that Germany could call upon in Latin American waters were foreign mercenaries hired by German naval intelligence.

* * *

Footnotes

[1]. William P. Frye was sunk at sunk at 29°45' S and 24°50' W. Her destination was given as Queenstown, Falmouth or Plymouth.

[2]. Martin, pp. 295-296. Von Erckert was born in 1869 in Berlin and had been German minister in Santiago since 1910.

[6]. Martin, pp. 291-292. Luxor was loaded with 3,600 tons of coal when it departed at midnight “without the customary papers and without the permission of the authorities.”

[7]. Sperry, p. 39, Martin, pp. 292 and 301, and Katz p. 413. The Kosmos Line petitioned the Chilean government on September 29, 1914 for permission for Luxor to embark up to 12,000 tons of coal to distribute to the Kosmos fleet, rather than compel the disbursed ships to make a special trip to coaling ports. Katz writes that the head of the
Etappendienst in the US was one Knorr.

[12]. Johnson Edwards cites brief remarks by Captain Lüdecke to a visiting “Captain Wiebliz” (a Kapitänleutnant Ernst Wieblitz appears on the wartime list of naval officers) suggesting that a wooden box, which was custom made on board Dresden by carpenter Gregor Bitter then sealed with tar, encased in concrete and topped with five iron hooks, was hidden someplace in Quintupeu fjord, possibly by Canaris and torpedoeman Karl Hartwig, containing a “Mexican treasure.” Lüdecke allegedly remarked, “Our destiny is too uncertain to continue with this responsibility [of safeguarding the treasure].”

[13]. “Geneis de las Pretensiones Argentinas Sobre el Territorio Chileno del Canal de Beagle,” 2005 (available at: www.soberaniachile.cl/argent6.html, accessed October 31, 2005). The Chilean Navy’s
Dirección General de la Armada insisted on December 30, 1914 and February 3, 1915 that the government permit the establishment of a
Subdelegación Marítima in the disputed islands. Previous requests had been submitted in December 1911 and June 1914.

[14]. January 3, 1915 telegram B. No. 477 from Foreign Office to German Embassy, Washington. This message requested that von Erckert, Moller and Stubenrauch notify
SMS Dresden that “the safest way home is the sailing ship route…”

[15]. Martin, pp. 310-315, and “Hilfskreuzer SMS Moewe: Ships – Dresden,” and West, Nigel, The SIGINT Secrets, Morrow, New York, 1986, p. 78. Dresden casualty figures vary: eight or nine killed and somewhere between sixteen and forty wounded. The destruction of the East Asiatic Squadron allowed Australia’s newer warships to be dispatched to the Atlantic and Mediterranean theatres, while ANZAC troop convoys could now sail with lighter escorts to Europe and the Middle East.